Thursday, May 19, 2022

Shaping the Australian grocery market in 2022

IGD has identified five new themes that will continue to evolve at pace, shape the market and influence retail strategy.

By IGD Head of Asia-Pacific Retail Insight Nick Miles.

Australia is learning to live with the pandemic as lockdowns ease and borders reopen. While this is good news, there will continue to be significant impact on retail operations over the next year.

Addressing these challenges and responding to shopper behaviours that either stick or revert to those pre-pandemic will be an ongoing focus for retailers. At the same time retailers will continue to invest so that they’re well placed to emerge stronger than ever.

With an eye on the next year, IGD looks at what this means for suppliers, and five trends to watch in Australia.

Covid rebound

2022 has started with supply chain challenges and product shortages due to staff absences. Spend will likely switch from in-home back to out-of-home consumption channels, while at the same time more people are expected to remain working from home than before the pandemic. These dynamics will shape how retailers focus their efforts and strategies.

Retailers will continue to face significant operational challenges this year. The best suppliers will be on the front foot in predicting and understanding these. Ensure that you’re seen as supporting them, as well as their shoppers.

Advancement of online grocery

Australia’s online grocery channel has been supercharged by the pandemic, with Woolworths and Coles leading the way, boosting capacity and driving record levels of penetration. However, some retailers are at the start of their journey in the channel and playing catch-up.

While some spend will switch back to physical stores as Covid restrictions ease, early signs are that online grocery will stay elevated post-pandemic, and we forecast the channel in Australia will have a market share of 10.3 per cent by 2026, up from 4.8 per cent today.

Both Woolworths and Coles will be using 2022 to build further automation within their online grocery operations. Understand what this means for your brand strategies, ranges and pack formats. Be ready for going live in 2023.

Read the article in full in the April issue of Retail World.

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